The proposed project was first reported by Reuters in February, when Colombia’s mines and energy minister, Amylkar Acosta, said the two companies would work in a joint venture to develop the CBM reserves.

The project will be developed in Cerrejón’s mining area, where Drummond holds the right to produce methane gas.

Cerrejon and Drummond are the leading coal producers in Colombia. Cerrejon, owned by BHP Billiton, Anglo American and Glencore Xstrata, produced 33 million t of coal last year.

Colombia has included CBM in its tender for oil and gas exploration and production contracts this year.